Planning for the unexpected is never easy. Although you may be healthy now, it is never too early to establish plans to provide for your loved ones in the event of your incapacity or passing.
As you begin your estate planning process, you might be interested in knowing what probate court is and why it exists. Then you can establish your will and take steps to keep your estate out of probate. Through planning now, you might be able to provide a smoother transition for your loved ones once you are gone.
What happens in probate court?
The probate process authenticates your will after you pass away. If you do not establish an estate plan, the probate court would determine how your loved ones locate and determine the value of your assets, pay taxes and distribute the remainder of your estate.
In some cases, despite your best efforts, one of your loved ones could feel they have reason to contest your will. For that reason, it could end up in probate.
Your loved ones might want to secure representation as a guide through the probate process to help them:
- Petition the court – They might need to file your death certificate and your will if you established one.
- Attend a hearing – Depending on the circumstances, a court may require your loved ones to testify that they saw you sign your will.
- Appoint an executor – If you did not specify an executor in a will, the probate judge will appoint someone to administer your estate.
- Post bond – Depending on the situation, an executor may need to post bond prior to acting on behalf of your estate.
- Collect your assets – This might include a review of tax documents, insurance policies and collectibles.
- Determine asset values – An appraiser could determine the value of your assets on the date of your death.
- Notify creditors – Your loved ones might need to publish a notice of your death in a local newspaper and make creditors aware of your passing.
- Pay off debts – Your debts must be paid. These may include final expenses and those related to creditor’s claims.
- File taxes – Your loved ones would need to file your final tax return for the year in which you died and pay any outstanding taxes.
- Distribute the estate – With the court’s permission, your loved ones might divide any remaining assets according to what they believe to be your wishes.
It is important to remember that each situation is unique. However, comprehensive estate planning and regularly updating your will might help you save your loved ones’ time and money by avoiding probate once you are gone.